By: AIF Staff
Washington, DC – Earlier this week at the Bipartisan Policy Center, American Idea Foundation President Paul Ryan joined a panel of experts from the private and public sectors to discuss the future of the Earned Income Tax Credit.
The event, which was the latest in a quarterly series hosted by the American Idea Foundation, featured a wide-ranging conversation between Ryan and JPMorgan Chase CEO Jamie Dimon, moderated by BPC President Margaret Spellings, and remarks from Maryland Comptroller Brooke Lierman.
The dialogue between former Speaker Ryan and Dimon focused on how policymakers and private sector leaders can expand economic opportunities for hard-working Americans, while also touching on the national debt and the impact it will have on economic growth moving forward. The pair discussed how to improve poverty-fighting policies like the Earned Income Tax Credit and how to better utilize technology to administer these credits.
A recap of the media coverage from the event follows.
Just the News: Ryan, Jamie Dimon warn U.S. nearing edge of fiscal cliff: ‘Most predictable crisis’
Former House Speaker Paul Ryan and JPMorgan Chase CEO Jamie Dimon are warning the American public and U.S. elected officials that the nation is nearing the edge of its fiscal cliff, calling it the “most predictable crisis” the country faces.
Ryan said interest payments on the U.S. national debt will exceed the entire Pentagon budget within 5 years. Dimon said quantitative easing during COVID cost about $4 trillion, describing it as “fiscal irresponsibility” that has consequences…
“There will be a rebellion and that’s the worst possible way to do it. There’s a cliff. We see a cliff. It’s about 10 years out,” Dimon said during a Bipartisan Policy Center discussion Friday on “Building Greater Economic Security for Working Families.”
“It’s the most predictable crisis we’ve ever had,” Ryan added.
“Exactly,” Dimon replied. “This is about the security of the world. We need a stronger military. We need a stronger America. We need it now.”
Ryan said a “statutory” fiscal commission is the only way to solve the grave financial challenges facing America as it heads toward $35 trillion of debt….Ryan said entitlement program reform must be part of the solution to put America on a sound fiscal path in the next 10 years, but neither President Joe Biden nor former President Donald Trump, the 2024 GOP presidential frontrunner, currently support changes to Social Security, Medicare or Medicaid.
Ryan empathized that a statutory fiscal commission would be the best way for entitlement reform to come to fruition.
CNBC: Improving this tax credit for low- to middle-income families is a ‘no brainer’
The EITC — which provides around $60 billion annually to workers and their families — could be reformed to be more efficient, experts said at a panel hosted by the Bipartisan Policy Center on Friday.
“This is like a no brainer, lift up society,” JPMorgan Chase CEO Jamie Dimon said. “And I would pay for it by taxing the wealthy a little bit more.” Increasing spending on the earned income tax credit would give more money to households and communities, and therefore providing more money for food and children’s education, he said.
“It brings dignity,” Dimon said. “That money will be spent in local communities….”
Approximately 1 in 5 workers who are eligible for the federal earned income tax credit fail to claim it, according to the Bipartisan Policy Center. In addition, there is also a high rate of improper payments, due to the credit’s complex eligibility rules. Having a more efficient system could make it possible to have it so the credit shows up in workers’ paychecks, rather than as one lump sum when they file their taxes, he said.
“I would rather have it embedded in the paycheck itself, so that each pay period you have that higher pay, so that you can budget more accordingly,” Ryan said.
Improved technology could also help get the earned income tax credit to eligible workers who are not currently receiving it, while also making it easier to change the terms of eligibility.
“We have a lot of expiring provisions coming in tax law at the end of the next session of Congress,” Ryan said. “There is where you have churn of tax policy where you probably have an opportunity to make some of these expansions.”
The Well News: Ryan Calls EITC ‘Best Tool in the Arsenal’ for Economic Mobility
According to Paul Ryan, former speaker of the House, on hand at the Bipartisan Policy Center to discuss economic security for working families, the impending reopening of the federal tax code in 2025 may be an opportunity to consider enhancements to the EITC.
“If you are pushing for a society that is known for upward mobility, and you are striving for equality of opportunity, the best tool in the arsenal that we have today is the EITC,” Ryan said.
“This is as much of a no-brainer policy as I have ever seen,” agreed Jamie Dimon, JPMorgan Chase CEO and chairman….
Saying the EITC “has proven to be very effective,” Ryan emphasized that technology is the key to enhancing the program’s efficiency further.
“The reason we couldn’t fix this when I was running the committee that deals with this, is technology,” he said. “By now, surely technology can solve this problem; Can make sure that [the credit] goes to who it needs to go to…Can clear up waste, fraud and abuse.”
Doubling down on his criticism of the Treasury Department’s “terrible data system,” Ryan said that with the right software, EITC could be a “monthly or biweekly” credit “embed[ed] in a person’s paycheck.”
In addition to addressing the shortcomings of the current data systems and software at Treasury, Dimon prefers any updates to the EITC “get rid of the child requirement,” which Ryan has also previously endorsed, and simplifying the credit as a straightforward benefit.
“It is either that or universal basic income. Those are the two debates in front of us,” Ryan said. “Smooth disincentives and focus on individual customized benefits that get people to work.”
Video of the entire panel discussion at the Bipartisan Policy Center is accessible here.